The link between renewable energy production and gross domestic product in Africa: A comparative study between 1980 and 2008

Abstract

Renewable energy (RE) projects are arguably one of the most important strategies that can be used in the mitigation of climate change impacts. At the same time, RE technologies can generate clean energy and potentially boost the economy of the African continent. It is thus not surprising that recent studies have investigated the relationship between RE and economic growth in some African countries. However, the limitation of these reductionist analytical frameworks is that they can conceal the true regional picture in terms of the link between investments in RE technologies and gross domestic product (GDP). This holistic analysis is important in order to inform regional policies on climate change. The article uses statistical analytic techniques to examine the correlation between RE production and economic growth across different blocks of the African continent between 1980 and 2008. The analysis is between geographical blocks (e.g. Southern Africa, Western Africa, etc.) and between oil and non-oil producing blocks. Generally speaking, while there exists a similar pattern in all the studied blocks in terms of mean, standard deviation and correlation between RE and GDP, a few exceptions can be found. For instance, the rise in RE–GDP correlation from 1992/1993 onwards was conspicuously higher in North Africa and oil-producing countries compared to all the other blocks. Similarly, Southern Africa was the only block where the correlation between RE and GDP was negative throughout the period under review, except 1988, 1989 and 1997 when it was positive.